McIlvaine v. Smith

Holmes, Judge, delivered the opinion of the court. The case is submitted upon the questions, first, whether, under the terms of the trust deed, Thomas F. Smith took an estate or interest in the land that was vendible under execution; and second, whether the plaintiff 'is entitled to any relief upon this bill, or can, by any proceeding in equity, reach the profits of the land during the life of Smith. There is no allegation of fraud, and the validity of the deed is admitted. It is to be taken as a voluntary conveyance in good faith and upon a good consideration. . The deed creates a trust; and the trusts declared are of such a nature as to preclude the execution of a use in Smith as the original grantor under the statute—Guest v. Farley, 19 Mo. 147. It is a trust of which the scheme has been completely declared in' the outset, and may — 55 — be considered so far as an executed trust. It is not executory in any sense that would require the aid of a court of equity to prescribe the mode in which the trusts are to be executed ; but the execution of the trusts, as declared, would be enforced, in equity. It is an express trust, and there is no room to infer a resulting trust by operation of law for the benefit of Thomas F. Smith. The first question is, whether the trust declared for his benefit creates an equitable estate in the land that could be levied on and sold under execution. By the statute, “ all real estate, whereof the defendant, or any person for his use, was seized in law or equity,55 is subject to sale under execution; and the term real estate includes “ all estate and interest in lands, tenements, and hereditaments55—R. C. 1855, p. 740, §§ 17, 73. The statute contemplates an interest or estate in the land, of which the defendant, or the trustee for his use, is seized in law or equity; and when there is no seizin of such an equitable estate, there is no interest in the land which is liable to execution—Brant v. Robertson, 16 Mo. 149. It was said in Broadwell v. Yantis (10 Mo. 403) that “ there must be an interest in land which a court of law can protect or enforce, in order that it may be subject to the lien of a judgment and execution,'5 and that “ a mere equity, unaccompanied with possession, is not such an interest.55 The previous decision of. this court would seem to warrant a distinction, in reference to the beneficiary, between a vested equitable estate in possession and a mere ground of equitable relief against the trustee, as a simple right to maintain a suit in equity—Anthony v. Rogers, 17 Mo. 394; Rankin v. Harper, 23 Mo. 579; Dunnica v. Coy, 24 Mo. 167. The case of Broadwell v. Yantis recognized the authority of the case of Bogert v. Perry (1 Johns. Ch. C. 52), which appears to have proceeded upon a distinction of this nature; and it was there said that there must be an equitable title or estate within the purview of the statute of uses, and not a mere equitable interest in the land. It is not very clear what was meant by such an interest, but it may He supposed to mean such an interest only as might fmÉEsh a ground for equitable relief- against the trustee to enforc» the execution of the trust, or “ an equitable chose in action”^ s it was said in that case. — 56 — A life estate in land, at common law, was evidenced by the tenant being clothed with the possession under the name of livery of seizin, and he became a freeholder. Trusts are cognizable only in equity, and it was for the reason that the collateral obligations of trusts were not known at law as interests in lands that they took the name of equitable estates. A simple trust supposes the legal estate merely to be vested in the trustee, and that the cestui que trust is entitled in equity to the rents and profits, and has power to dispose of the lands, and a right to call upon the trustee to execute a conveyance to him — 2 Washb. Real Prop. 166, 220. Under this deed it is plain that Thomas F. Smith had no seizin or possession of the land, no power to dispose of any estate in the land, or to enjoy the occupancy or to collect the rents ; nor could he call upon the trustee to execute any conveyance to himself. His interest, whatever it may have been, does not appear to have had the ordinary incidents of a life estate in land, either at law or in equity. We think it is sufficiently clear that the deed did not vest in him an equitable estate in the land itself, to be enjoyed in possession or otherwise. The levy, sale, and sheriff’s deed to the purchaser, under the execution, described the property as “all the right, title, interest, claim, estate, and property, of the said Thomas F. Smith, in and to” the lots mentioned and designated by metes and bounds. Wo must hold that he had no estate in the land which could pass by that description. In England, a judgment is made a charge in equity on all lands and equitable interests, and the lien may be enforced by the courts of equity and be made available even by a sale—Adams’ Eq. 130, 133. In that way there is less danger of a sacrifice of property in consequence of the difficulty of ascertaining what those interests are ; but if all equitable estates and interests were subject to sale under execution, the seller could seldom know what he was selling, nor the purchaser what he was buying, and valuable property would almost inevitably bo sacrificed, or the levy and sale would prove., utterly futile. Considerations like these may justify us in confining the meaning of the statute to its clear and express terms. — 57 — Many cases from other States have been cited by the defendants’ counsel, which may be taken as examples of equitable interests that are not vendible under execution; and some cases also of bounties given by the donors for the maintenance and support of the beneficiary, or of a man and his family, under limitations and restrictions as to the interest conferred that were held to preclude the vesting of any interest or property which could be subjected to the payment of debts even by a judgment creditor’s bill—Johnston v. Zane, 11 Grattan, 552; Fisher v. Taylor, 2 Rawle, 33; Holdship v. Patterson, 7 Watts, 547; Brewster v. Striker, 2 Comst. 19; Ashhurst v. Given, 5 Watts & S. 323; Markham v. Guerrant, 4 Leigh, 284. Upon the question whether this interest was subject to levy and sale under execution, they give a strong support to the construction we have given to the statute, but none of them can be regarded as decisive of the point that the interest of Smith, under this deed, was not a vested interest for life in the net product of the rents, issues, and profits arising out of this land, which may be reached by the creditor and applied in equity to the satisfaction of this debt. This brings us to the second question, whether the plaintiff is entitled to any relief on this bill, or can, by any proceeding in equity, reach this net income during the life of the beneficiary. What interest, then, did he take ? By the terms of the deed, during his life the trustee is to control and manage the property, to make loans and receive the rents and profits, to pay all the taxes, charges, insurance, and other expenses, and to pay over to Thomas F. Smith at the end of each quarter, during his life, “the net product of said property,” under the restrictions mentioned, with remainders over and a power of appointment as therein expressed. This gave him a vested life estate in this net product, of which the trustee could not deprive him by the exercise of any discretion. He was bound to pay it over to Smith, and it is not given to any other person. So far the case is similar to that of Green v. Spicer (1 Russ. & M. 395). Other cases fully support this construction—Piercy v. Roberts, 1 Milne & K. 4; Hallett v. Thompson, 5 Paige Ch. 583; Dick v. Pitchford, 1 Dev. & Batt. Eq. 480; Bryan v. Knickerbocker, 1 Barb. Ch. 409. As it was said in Brandon v. — 58 — Robinson (18 Ves. Jr. 429), it could not be contended that he had no interest until he tendered himself-personally to give a receipt, nor that if he refused to give a receipt during his life, and allowed the income to accumulate, it would not be assets for his debts: it would-clearly be so—2 Story Eq. Jur. § 974, a. There is no limitation over of this whole interest upon any condition that could determine it, short of the period of his life. The restriction expressed concerns only each quarter’s rent as it becomes due, and this is only that if, by any personal act, he shall assign or in any manner attempt to anticipate the income of any quarter, that quarter’s income shall go over. The additional clause further shows very clearly that he was to be the owner of this interest in the net product, but not of the income of any quarter until it had accrued; and any attempt to anticipate should prevent him or his assigns from having any interest in the quarter’s income so attempted to be anticipated, and in this case it was to go over. There is no question here of any personal act, or attempt to anticipate, within this restriction. There is no question of any assignment by an act of bankruptcy or an insolvent’s schedule. The levy and sale under execution being ineffectual to pass this equitable interest, there is no question of an assignment by the act of the law in invitum. The case is really that of a judgment creditor seeking a remedy in equity against this property of the debtor, to subject it to the payment of his debt. The property is of such a nature that it cannot effectually be reached at law; but it is quite a different thing in equity. Here is an attempt of a man, apparently, to tie up his own property under a trust in such manner that himself, as owner, may be enabled to enjoy the income and set his creditors at defiance. This is a thing which the law does not allow. A man cannot own property or money and not own it at the same time. Whatever might be said of the justice or honesty of the thing in point of morals, it is enough that such an arrangement is in contravention of the rules of law and equity. He cannot be permitted to have the beneficial enjoyment of an income of this nature, beyond the reach of his honest debts. — 59 — As it was said by Lord Eldon, in a similar case, ££ be cannot prevent his creditors obtaining any interest in it,, though it is his.” Nor, when the property is actually given to a man in this manner for life, can the donor take away the incidents of a life estate, nor annex restrictions that shall deprive him of all power of alienation, though he may reduce the interest to an estate short of a life estate by a limitation over—Brandon v. Robinson, 18 Ves. 433; Graves v. Dolphin, 1 Sim. 66; Lear v. Leggitt, 2 Sim. 479; Shee v. Hale, 13 Ves. 404; Piercy v. Roberts, 1 Milne & K. 4 . An exception may be permitted in favor of a married woman (as to the power of alienation), to the extent that the power is created by a court of equity, in reference to her, a separate property; but no further—Barton v. Briscoe, Jac. R. 603. It is further to be observed that this was not a bounty coming from another under rigid restrictions for maintenance only, and excluding all ownership off any interest in the fund, but the beneficiary was himself fhe_d.onor. with no restrictions which can be admitted to exclude a vested ownership for life. In such case, especially, the court will lean in favor of a vested interest. The cases show that the proper remedy in such case is a bill by the judgment creditor to have the rents and profits, as they accrue, applied in equity to the satisfaction of the debt, as far as they will go, and the powers of the court are ample to make the remedy effectual—Bryan v. Knickerbocker, 1 Barb. Ch. 409; Dick v. Pitchford, 1 Dev. & Batt. Eq. 480; Hallett v. Thompson, 5 Paige Ch. 583. There would probably be no occasion to take the property out of the hands of the trustee; but he might be enjoined from paying over the quarterly rents to Smith, and directed to pay them over for the satisfaction of such decree as might be rendered. The commencement of suit would create an equitable lien on the rents and profits in the hands of the trustee accrued or to become due; and a master might be directed to take an account, or such other proceedings be had as might seem proper, according to the practice in equity—2 Spen. Eq. Jur. 40, 798. It will be apparent that the plaintiff was not entitled to relief upon this petition. It was not framed with a view to the relief — 60 — that might be granted as above indicated. The demurrer was properly sustained. The judgment will therefore be affirmed. The other judges concur.